It's incredibly important that your son knows who his biological father is - I get that your fiance is a father figure, but he's not Dad.

If Dad truly doesn't want to have anything to do with his son, get married, and go through a stepparent adoption. You will need an attorney no matter which way you go, to make sure nothing can be overturned in the future.

Finally - never trust caseworkers who decide that a parent is mentally unstable. Unless they are actually psychiatrists or psychologists who have diagnosed the parent, they are NOT qualified to utter such words.